Tata's Rs 1 lakh Car may bet bikes

The much-touted "people's car" from the stable of Tata Motors could create a major dent in the top-end motorcycle sales with its lucrative price tag, which has become a global case study, global consultancy firm J D Power today said. If Tata's are able to get quality and customer satisfaction parameters right, the 'People's Car' could shift buyer from a top-end two-wheeler on account of its safety and convenience factors, it said.

"The two-wheeler market in India could see a dent at the top-end because of the Rs one lakh car, but how far reaching will it be, will depend on the product's performance, after sales service and overall customer satisfaction," JD Power Director India Mohit Arora said. The progress of the car is being monitored by automobile industries across the world for possible replication in different markets. "Rs one lakh car is a case study which the whole world is watching. If successful, the car can spark demand in a new segment. Brazil and China are looking for similar products," J D Power Asia Pacific Managing Director Gerrit Kuyntjes said.

The firm, however, cautioned that Tata's would need to get its product right at the first shot as the dynamics of Indian automobile market have changed over the years. "Unlike Indica, in which Tata Motor's got a second chance, it is doubtful if it would get a similar one with the Rs one lakh car as consumers have become more discerning and demanding," Arora added. Even the rural customers, one of the main targets of the car are becoming demanding and less forgiving, he said. Commenting on the Indian passenger car market, Arora said: "The car market would see exciting times ahead with sales volume expected to cross the 1.8 million units mark by 2010."

He said the industry would need to focus on car as a high-value product and needs to retain customers with significant amount of re-purchases coming in. Considering the growth of the Indian economy, the growth of the Indian automobile industry would be high and companies which are able to tap the rural market would benefit the most, he said. J D Power, which plans to start its syndicate services in the Indian two-wheeler market predicted a phase of consolidation of market share as homegrown companies slug it out with foreign competitors. Predicting a good future for the two-wheeler industry, Arora said, the market would continue to grow as its reach expands into the rural areas. "Even for the two-wheelers, quality would be paramount as they report three times more problems compared to a four-wheeler," he added.